Low Income? Yes, You Too can Buy a Home in Champaign County

Do you want to buy a home in Champaign County, but are living on a low income? There are many people right now in your shoes. But there's no need to throw that dream away just yet. There are options out there for people in a fixed income to buy a home.

You may be thinking "Sure, but what about the down payment? That can cost thousands that I don't have or can't save." Well, the good news is that there are government programs that can help you buy a home with a lower down payment, or even no down payment at all.

Let's take a look at some of the ways that people with a lower income can buy a home in Champaign - Urbana.

Low Income Mortgage Loans

These following programs are specifically designed for low-income home buyers and offer these advantages:

  • Very competitive interest rates and mortgage payments
  • Discounts on mortgage insurance premiums
  • Low down payment requirements
  • Down payment assistance whether by grants or loans

Keep in mind that these loan programs usually require you to complete some form of approved homebuyer education, especially when you’re a first-time buyer. But it's definitely worth it to get into your own home.

FHA Loans

FHA loans are backed by the government. The government does not give you the money, but instead backs private lenders who give out the actual loan. With a Federal Housing Administration (FHA) loan, there aren't as many requirements to qualify for a mortgage. You can get an FHA loan with a credit score as low as 500, but you will no doubt have to come up with a down payment of 10% or more. It will be easier to get a loan through this program if your credit score is above 580, however. The lender may also accept debt to income ratios of as much as 45%.

FHA loans are also beneficial in that you can put as little as 3.5% down if your credit score is good enough.

HomeReady and Home Possible Advantage Loans

Fannie May and Freddie Mac offer loans for low income buyers called HomeReady and Home Possible respectively. These loans require a down payment of 3%. You are also allowed to get the down payment money from gifts, loans, or grants. Another advantage of these programs is that the seller can pay some or all of the closing costs up to 3% of the loan value.

VA Loans

For those who serve or have served our nation in the armed forces, there's the VA home loan. Your credit score doesn't matter and they will finance the entire purchase price, with no money down! And you also don't have to pay mortgage insurance. There is a funding fee, however, but this can be added to the loan amount. VA loans are a great benefit for military members and veterans.

USDA Loans

If you live in a rural area, the USDA may be for you. It offers homebuyers up to 100% financing without any requirement to find a down payment. They operate two programs – Guaranteed and Direct – based on your income relative to the median income in the Champaign County area you are buying in. Generally, the population must be under thirty-five thousand for an area to qualify.

There are other programs beyond these that can help you buy a home with a low income. Feel free to contact Rose Price today to see how you can make your dream of owning your first home in Champaign County a reality.

Visit our blog twice a week for more helpful real state articles and local Champaign County news. Follow us on Facebook! Rose Price can help you find the ideal home in Champaign - Urbana! Start your home search now with our powerful home search feature.

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